Your Guide to Closing Costs is here!
If you are on the homebuying journey, it is important to factor in closing costs to your budget. While many are saving for the down payment, it’s equally imperative not to overlook the preparation for closing costs.
Here are some pointers to understand closing costs. Closing costs encompass the fees and expenses that have to be settled before officially assuming ownership of a property.These costs are contingent upon certain factors like the purchase price of the property, the financing structure, and any points in the negotiations. They entail additional payments due at the closing stage. They include government recording charges, appraisal fees, credit report fees, lender origination fees, title services, tax service fees, survey fees, attorney fees, and underwriting fees.
You may be asking yourself, how are these calculated? According to Freddie Mac, closing costs typically range between 2% and 5% of the total purchase price of the home. To provide a practical estimation, consider a hypothetical scenario where a home is priced at the current median value of $384,500. Applying the 2-5% estimate from Freddie Mac, closing costs would range approximately between $7,690 and $19,225. It is important to note that closing costs will vary depending on the specific circumstances and the price range of the property in question.
How can you prepare? Freddie Mac further advises prospective homebuyers to gain an understanding of associated costs from the down payment to closing costs at the beginning of the homebuying journey. Collaborating with reputable real estate agents is essential and they understand the market and the costs you will be looking at. We also provide access to a network of experts that can help secure resources to address any queries or concerns that may arise throughout the process.
Thoroughly planning for the financial obligations that accompany real estate transactions especially on closing is a key part of the sale.
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